Heineken NV, the world's third-largest brewer, forecast lower beer consumption in many regions, limited price increases and few cost benefits this year after reporting 2009 results broadly in line with expectations.
Heineken, like other brewers, suffered from recession-conscious consumers drinking less beer in 2009 but succeeded in pushing through price increases.
"The global economic environment will continue to lead to lower beer consumption and down-trading in a number of regions in 2010," Heineken said in a statement today.
The Dutch company, whose chief brands are Heineken and Amstel, said it was committed to maintaining or increasing prices and would continue to pass on excise duty rises to consumers. However, it said that price increases would not be as steep this year as they were in 2009.
The likely fall in raw material costs per hectolitre due to a temporary decline in the price of brewing barley would be offset by higher energy costs, rising advertising rates and increased marketing costs.
It would continue to drive through its three-year total cost management plan, which yielded €155 million in savings to operating income its first year in 2009.
Heineken said that earnings before interest, tax (EBIT), and one-offs rose by 14 per cent on a like-for-like basis to €2.095 billion in 2009. The average forecast in a Reuters poll of 14 analysts was €2.10 billion.
That came despite a 5.4 per cent fall in underlying consolidated beer volumes. A 4.5 per cent improvement in pricing and sales mix translated into a 0.2 per cent drop in revenue. Cost cutting then explained the profit increase.
SABMiller said last month that its underlying beer volumes were flat in the last three months of 2009 as consumer demand in emerging markets offset declines in Europe, North America and South Africa.
Heineken's pain has been greater than its peers given that some 70 per cent of the Dutch brewer's operating profit comes from the more sluggish European and North American markets.
Heineken bought Scottish & Newcastle with Carlsberg for £7.8 billion in 2008, chiefly getting the British assets. However, it is set to boost its emerging market presence to 40 per cent by buying the beer business of Mexico's FEMSA.
Carlsberg also reports 2009 results today.
Reuters